How Market Price optimizes price guidance through Index

When Index Exchange (Index) sends bid requests to DSPs, we pass pricing signals to help DSPs submit more winning bids. To determine these signals, we use a feature called Market Price.

Market Price analyzes historical data to determine optimal bid prices, then passes them to DSPs to make sure they submit bids that are able to compete. If the Market Price is higher than a publisher’s Index UI floor settings or the floor that the publisher sends us in their bid request, we send the Market Price value to DSPs so they can bid more strategically.

For DSPs, Market Price provides several key advantages:

  • We send reliable price guidance on 100% of Index traffic, making price discovery cheaper and easier.

  • Market Price fills in the gaps where publisher signaled floors are missing or below the ad server floor, reducing the likelihood that DSPs will lose auction due to bids below hidden floors.

  • By providing better price guidance, Market Price improves the ability for DSPs to submit bids that have a higher chance of winning an impression.

  • Market Price signals the same floor to every DSP, ensuring a fair and efficient auction.

How it works

Index pre-calculates Market Price floor values of bid requests based on historical data. As part of the calculation, several parameters including the country, size, and media type are considered. This calculated floor value is stored, constantly updated, and considered for bid requests that publishers send to Index.

When determining the bidfloor value to send to DSPs, the following process occurs:

  1. Index receives a bid request from a publisher.

  2. Index retrieves floors that are valid for the auction:

    • Request floor: The value specified in the bid request imp.bidfloor field that publishers send to Index.

    • Index UI floor: Any relevant floors set by publishers in the Index UI.

    • Market Price: The value that Index pre-calculates and determines based on historical data. If we do not have enough historical data to generate a floor, the Market Price is not determined and is not considered in the auction.

  3. One of the following occurs:

    • If there are no associated deals or the deal is set to compete in the open market, Index sends the highest value determined in step 2 to DSPs in the bid request imp.bidfloor field. Index also signals the higher value between the deal price and open market floors in the bid request deal.bidfloor field.

    • If there is an associated deal and it does not compete in the open market, Index sends the designated floor price for this direct deal to DSPs in the bid request deal.bidfloor field.